Posted by Adam Gordon on Jan 16, 2012 in 2025, all, economy & finance, strategic foresight, technology change
Financial markets are delicately poised at the start of the year, to say the least. A steady low-bubbling stock rise – what the FT calls a “stealth” rally – has left the S&P 500 index at a five-month high and the Dow up 10% in 6 weeks, flying in the face of the 2012 analyst outlook which is on-the-whole bearish amid Eurozone debt and global growth concerns.
Bears are in a surprise squeeze. Not so long ago it was rebound-optimist Jon Corzine of MF Global publicly taking the hit that many others were privately taking too.
It’s certainly not news that markets don’t behave as expected, nor that emotion drives decisions, but Joan Foltz, author of Market Whipped: And Not By Choice (Alsek, 2012) suggests something further: that we are going through a basic shift in how markets work and therefore how to succeed in them.
She says the financial markets have become a MMORPG, that is, a “massive multiplayer online role-playing game.” In gamer world, a MMORPG is a vast virtual world where an effectively unlimited number of players assume characters and interact with each other in a persistent and ever-evolving “reality.”
The same computation and virtualization platform technologies that have produced game worlds also underpin financial markets, and are therefore unsurprisingly producing similar effects.
Buy a stock and you have entered a virtual arena of realms and battles, with characters taking roles in stories that play out over a known (to insiders) time period. There are masters and magicians and druids and emporers, and who knows what else, all gaming for your money. Play the game right, and you win theirs.
Says Foltz: “Keep the market in mind as you go through this list of features:
Who are the characters in the game? High-frequency traders, hedge funds, corporations, pension funds, celebrity investors, the media, the government, to name just the obvious ones.
Into this world walk investors who think the markets are what they used to be, and work how they used to work – that they are understandable through due-diligence in research, and winnable by well-considered valuations or by technical analysis. No surprise that they find themselves surprised. In gamer world, nothing is as it appears and nothing works out as expected.
Game on
Foltz’s argument is that traders of all stripes improve their results by acknowledging market MMORPG and thinking like a gamer. That is, seeking to understand where the battle is at any time; recognizing who battles whom, under what conditions, and for how long; knowing who the strongmen are in their realm and what story is playing out.
Investors should know their own token in the game, its attributes and ammunition, as well as its limitations. This will improve judgment of where to be, when to come and go (market timing), and encourage quick exits from realms that are best left to more powerful, and perhaps, darker forces.
The book itself has a chaotic, breathless, aspect, and is marred by a tendency to conspiracy theory. But it does provide a productive analogy that sheds light on unchartered territory. In other words, it does what “futurists” should do when they do their job right: identify and illuminate a change in the world, and describe why assumptions and practices that worked in the past may fail going forward.
Posted by Adam Gordon on May 24, 2011 in 2025, all, leadership, strategic foresight
The World Bank on May 18 released a report “Multipolarity: The New Global Economy” with outlook for the geo-financial system to 2025.
“Multipolarity” catches the World Bank up with what has been clear for a long time: an actually, genuinely different global economic order is unfolding as growth moves to emerging economies, with countries such as China, India, South Korea, Russia, and Brazil accounting for the majority of economic growth in the next decade and beyond. And, on the back of this, the dollar will lose its pre-eminence as global reserve currency.
The report is nevertheless important at a meta-level. When the World Bank puts out a perspective, that means the perspective becomes more-or-less institutionalized wisdom. Global financial revolution, effectively, is no longer a theory out there. It is the “official future,” and financial and political institutions are more likely to act in line with it. Therein a reinforcing feedback loop.
Renminbi
A couple of things stand out. Report author Mansoor Dailami says the euro and renminbi will establish themselves on an equal footing to the dollar. This seems plausible, but one is left wondering – given the pace of innovation in finance, and in computing, and in communications and networking, and the 14 years to 2025 – will we still be looking at a system where national or regional currencies are “dominant?” Could the world financial system not evolve differently, for example away from a global reserve requirement altogether, or towards more multi-currency baskets? (The report does entertain the adoption of the IMF’s Special Drawing Rights system.)
The foresight principle: In looking at the future it’s tempting to see new agents dominating current structures, but often the structures themselves change.
The other point that pops out is an expectation that cross-border M&A deals originating in emerging markets will be an increasing feature of the new corporate landscape.
This is as solid a prediction as one will find. But it surely will not be one way. While cash-flush emerging-market companies will look to diversify into European and American companies, or take them over entirely – particularly ones that have Asian brand recognition and prestige (remember the Japanese corporate shopping trips of 1980s) – developed-world companies will be returning the favor, buying their way into emerging market companies to get a piece of their growth.
And we’re not talking passive investment here. The action will be immersive developed-meets-emerging market M&A (and surely also corporate raiding, hostile takeovers, etc.)
M&A is “speed” for corporate leaders. A big high, often followed by acrash. But if history is any guide, the lure of buying someone else’s growth, not to mention instantly enhancing a company’s industry size-power footprint, is more intoxicating than the sirens of Odysseus, so one can confidently predict it going forward.
Which is to say the spreadsheet-anticipated wins in economies of scale, scope, market synergies, or vertical integration of M&A will be up against the problems of marrying company cultures, systems, products, brand values and business models — a vexing problem that routinely defeats even the best business leaders.
But add to this, here, very significant cross-cultural management and staff issues, problems of distance, and regulatory systems that are often purposed to different ends, and you have a leadership challenge indeed for firms that venture down this path. But venture they must, because companies in low-growth markets can only buy back their shares for so long (aka “we’ve got no ideas about what to do with investor money, so we’re giving it back to you”) — witness GE’s $12bn share buy-back announcement this week.
Posted by Adam Gordon on Apr 8, 2011 in 2025, all, economy & finance, leadership, policy, politics of the future
The new axis in world diplomacy and global leadership flexes its muscles next week on Hainan Island – the southernmost tip of China – with the BRICS summit on April 14 in Sanya, and the Boao Forum the following day.
BRICS (Brazil, Russia, India, China, and South Africa) is already something of a “G5” of non-Western nations. Next week its leaders (China’s Hu Jintao, Brazil’s Dilma Rousseff, Russia’s Dmitry Medvedev, India’s Manmohan Singh, and South Africa’s Jacob Zuma) will set themselves to discuss their joint concerns in international affairs, economics, development, trade, security, etc.
More than anything, the event signals growing intention to coordinate views and act in closer alignment, and press towards future empowerment and responsibility of non-Western world leaders. Political clout has always gone with economic clout, and in this respect the future can be depended on to “rhyme” with the past.
BRICS countries already account for 40% of global population and 20% of global GDP – and they are the nations expected to grow most rapidly in GDP terms in the next decade and beyond, and to provide primary succor to neighbors in their regions.
Hainan 2011 is the third summit of the BRIC countries. The acronym BRIC was coined by Goldman Sachs (NYSE: GS) in 2001 in a chicken-and-egg prophesy: causing Russia, China, Brazil and India to see their interests as potentially aligned, and politically worth aligning. South Africa was accepted into the group in February.
Without stopping for breath, the diplomatic caravan moves 125 miles overnight up the coast of Hainan Island to Boao, where President Hu will give the keynote address the next day at the annual Boao Forum for Asia (BFA).
Boao is an undisguised knock-off of the World Economic Forum in Davos (with skiing replaced by snorkeling perhaps): a high-level gathering for policy and business influencers, with a similar nudge-and-influence mandate, here with an Asian focus. In attendence, in addition the the BRICS representatives, will be by Korea’s Kim Hwang-Sik, Spain’s Jose Luis Rodriguez Zapatero, Ukrainian’s Mikola Azarov, and New Zealand’s Bill English.
Posted by Adam Gordon on Sep 14, 2009 in 2025, all, emerging technologies, failed predictions, foresight tools & methods, managing uncertainty, Perils of Prediction, technology change
I note from a link on the Ian Miles Futures blog that “2025: Scenarios of US and Global Society Reshaped by Science and Technology” by Coates, Hines, & Mahaffie, is now available free for full-text download.
For full disclosure, I should say I worked in the Coates office in Washington D.C. during the mid-late 1990s (but got there just after the book was done.)
There are deep and ultimately overwhelming problems with the book itself. It sees science-technology as the primary driver of change, when what science is done and what technology is produced is often the product of policy or economic or values / zeitgeist decisions further up the chain. It also has an astoundingly poor conceptual framework (‘Worlds 1, 2, 3′) for dealing with non-US societies and cultures, and their economic and social development: one that would make Tom Friedman (‘World is Flat’) giggle and Hans Rosling surely cry. Truly there are many reasons they have to give this book away for free.
But its importance is elsewhere. It remains remarkable for one thing — the thing that the Coates & Jarratt foresight firm was known for — a willingness to speculate confidently and in detail (and sometimes even stupidly) about future changes. The book is likewise exemplary in its commitment to concrete, interesting, ‘fearless’ long-range speculation, in a world where most analysts waste most of their foresight ink timidly equivocating and covering their back.
Quality, reloaded
Evocative, concrete speculation is important, even if it is wrong. It is commonly misapprehended that the purpose of foresight work is to “predict the future,” (and someone with this perspective is going to pop up in 2025 and say “so, how right or wrong was this book?”) But, nobody can be right. The real value of foresight work is other: to know as much as we can about the present, and the forces and factors changing it, to be able to preconceive the full range of possible future outcomes that pertain, in order to make decisions today towards an outcome we prefer. (Who “we” are and what “we” prefer — social welfare; shareholder value maximization; environmental sustainability, etc., — will vary hugely among interest groups of course.)
This preconception (of a range of scenarios, if you like) is what allows truly effective discussions and debates to take place in considering alternatives, and therefore promotes better decision-making regardless of whether the scenarios ultimately turn out to have been, in themselves, ‘right’ or ‘wrong.’ High-quality scenarios are to be preferred of course, but quality is in the ability to stimulate and provoke management attention to the right areas in a timely manner, not in having been right in prediction. As Coates used to say (and I echo this to my Industry Foresight students): “You don’t have to be right, you just have to be interesting.”
read morePosted by Adam Gordon on Aug 20, 2009 in 2015, 2025, all, emerging technologies, forecast filtering, Future Savvy, strategic foresight, systems dynamics, trend tracking
Arsenal FC manager Arsène Wenger this week made a big prediction about the future of football in Europe. Now it’s hardly news when a sports coach predicts the future, but that’s because their forecasts are of the day-to-day variety and restricted to their own micro-climate: “Ronaldo has been going well in practice, I predict he’ll get on the scoresheet come Saturday.’ Or, ‘We’ll beat Chelsea in next months return leg,“ and so on.
Arsène Wenger
But this was different. Wenger (on the eve of the Arsenal vs Celtic Rangers Champions League match) predicted a “European League” in 10 years featuring the continent’s top clubs – that is, he offered foresight into potential structural, industry-wide change in multi-billion-dollar UK and European soccer industry.
Currently clubs play in their national domestic leagues. And all Europe-wide competitions are cup (pool stage + knockout) competitions.
Although not fleshed out, the form is not hard to see: the top four-or-so clubs from each major country (fewer from smaller countries) in one annual league competition. This means that Manchester United, Liverpool, AC Milan, Porto, Juventus, Real Madrid, Barcelona, Roma and so on would all be playing each other on a weekly basis throughout the year (and, presumably, playing in no other league competitions).
Drivers of Change
The point of Future Savvy is that one can judge the validity of predictions like this before time. In this case, part of the way to assess Mr Wenger’s future view would be to gauge the strength of driving vs blocking forces behind his outcome.
There is evidence of strong drivers in favor of a European Super League. These are:
1. The rise of “super-teams.” In the UK and across Europe the same few teams dominate their domestic league year after year. The reason is a simple reinforcing feedback loop where winning teams get more money (from TV rights, from gates, from merchandising, etc.) which means they can buy better players, which means they win more. Over the last decade the English Football Premier League has become, effectively, a competition between Manchester United, Chelsea, Liverpool, and Arsenal. (In the US the “draft–pick” system mitigates against any franchise getting too strong in this way, but no such system-balancer exists in European football.)
2. The growing ease and ubiquity of continental travel. Whether fans will follow their teams across Europe is a key issue, but indicators from cup competitions is that fans can and will travel.
3. The growing role of, and technological sophistication of television, particularly Sky Sports. Despite the many who travel, most people these days follow games at home or in sports bars. Television’s coverage and choices (the remote control options “red button”) have exploded, and screens themselves have got bigger and better. And genuine personalization of camera feed and other forms of interactively is emerging. In this, football, and professional sports as a whole, is becoming more about the screen as the stadium, accelerating a long-term trend. The reality is it makes little difference to most fans if the game is being played 50 miles away or 500.
4. The move to high-level, star-packed, events. There’s a clear trend across sports in general for events featuring the best players playing each other in all-star environments, not as a special “all-star” game but as an everyday occurrence. In cricket, for example, the Indian IPL has ridden this trend, offering franchised matches of, effectively, one mixed team of global superstars versus another. The fans love it.
There is also the financial do-or-die logic that soccer clubs face. The money feedback loop means they must continually drive up their revenues. It’s not possible to stand still. A European Football Super League would compel participation from the top teams for this reason alone.
vs Blockers
Adequately assessing the likelihood of the Wenger view of the future further requires investigation of blockers – factors which will prevent the outcome. In this case these may be overwhelming logistics of moving teams around to this extent week in and week out; limits on fans’ travel energy and budget; extent of fans’ loyalty to the relatively minor (non-super) domestic teams; and domestic league administrators’ determination and ability to keep domestic leagues from loosing their cash cows and following their own downward spiral into television obscurity.
These blockers on the European football league forecast are real. The question is whether they stop the future or how long they delay it. I’d judge the blockers as considerably weaker than the drivers and so I’d go with Wenger in predicting a European Super League (even richer and more “glamorous” than anything soccer has seen before) in about 10 years from now.
read morePosted by Adam Gordon on Aug 13, 2009 in 2025, all, emerging technologies, social change, strategic foresight, technology change
I’ve been following a fun little foresight project organized by Rohit Talwar of “FastFuture” contributed to by many members of the Association of Professional Futurists, which looks at new jobs that may emerge in the next 10-20 years as the result of science and technology advancement.
One of the benefits of thinking about science and technology foresight in terms of jobs is that doing so encourages a reality check, forcing the question: will someone get paid to do this, if so, by whom and why (how will it be profitable to the job giver?) In other words, the question is taken beyond whether one can imagine a job that will need doing or a job that someone might like to do it – that’s just mental bubble gum – to the more interesting and taxing issue of whether such need will justify enough paying customers such that the job will exist at all.
Of course, in all this science and technology progress will make new products and services possible partly by reducing the price point of providing them.
Not all of the jobs of the future listed below, I feel, pass this test. But many do. And it’s an interesting thought experiment. It’s a work in progress (see below.) The list as exists so far is:
1. Body Part Maker
Due to the huge advances being made in bio-tissues, robotics and plastics, the creation of body parts – from organs to limbs – will soon be possible, requiring body part makers, body part stores and body part repair shops.
2. Nano-Medic
Advances in nanotechnology offer the potential for a range of sub-atomic ‘nanoscale’ devices, inserts and procedures that could transform personal healthcare.. A new range of nano-medicine specialists will be required to administer these treatments.
3. Pharmer (sic) of Genetically Engineered Crops and Livestock
New-age farmers will raise crops and livestock that have been genetically engineered to improve yields and produce therapeutic proteins. Works in progress include a vaccine-carrying tomato and therapeutic milk from cows, sheep and goats.
4. Old Age Wellness Manager / Consultant Specialists
Drawing on a range of medical, pharmaceutical, prosthetic, psychiatric, natural and fitness solutions to help manage the various health and personal needs of the aging population.
5. Memory Augmentation Surgeon
Surgeons that add extra memory to people who want to increase their memory capacity and to help those who have been over exposed to information in the course of their life and simply can no longer take on any more information – thus leading to sensory shutdown.
6. ‘New Science’ Ethicist
As scientific advances accelerate in new and emerging fields such as cloning, proteomics and nanotechnology, a new breed of ethicist may be required. These science ethicists will need to understand a range of underlying scientific fields and help society make consistent choices about what developments to allow. Much of science will not be a question of can we, but should we..
7. Space Pilots, Architects and Tour Guides
With Virgin Galactic and others pioneering space tourism, space trained pilots and tour guides will be needed, as well as designers to enable the habitation of space and the planets. Current projects at SICSA (University of Houston) include a greenhouse on Mars, lunar outposts and space exploration vehicles.
8. Vertical Farmers
There is growing interest in the concept of city based vertical farms, with hydroponically-fed food being grown in multi-storey buildings. These offer the potential to dramatically increase farm yield and reduce environmental degradation. The managers of such entities will require expertise in a range of scientific disciplines, engineering and commerce.
9. Climate Change Reversal Specialist
As the threats and impacts of climate change increase, a new breed of engineer-scientists will be required to help reduce or reverse the effects of climate change on particular locations. They will need to apply multi-disciplinary solutions ranging from filling the oceans with iron filings to erecting giant umbrellas that deflect the sun’s rays.
10. Quarantine Enforcer
If a deadly virus starts spreading rapidly, few countries, and few people, will be prepared. Nurses will be in short supply. Moreover, as mortality rates rise, and neighborhoods are shut down, someone will have to guard the gates.
11. Weather Modification Police
The act of stealing clouds to create rain is already happening in some parts of the world, and is altering weather patterns thousands of miles away. Weather modification police will need to control and monitor who is allowed to shoot rockets containing silver iodine into the air – a way to provoke rainfall from passing clouds.
12. Virtual Lawyer
As more and more of our daily life goes online, specialists will be required to resolve legal disputes which could involve citizens resident in different legal jurisdictions.
13. Avatar Manager / Devotees – Virtual Teachers
Avatars could be used to support or even replace teachers in the elementary classroom, i.e., computer personas that serve as personal interactive guides. The Devotee is the human that makes sure that the Avatar and the student are properly matched and engaged.
14. Alternative Vehicle Developers
Designers and builders of the next generations of vehicle transport using alternative materials and fuels. Could the dream of underwater and flying cars become a reality within the next two decades?
15. Narrowcasters
As the broadcasting media become increasingly personalized, roles will emerge for specialists working with content providers and advertisers to create content tailored to individual needs. While mass market customisation solutions may be automated, premium rate narrow casting could be performed by humans.
16. Waste Data Handler
Specialists providing a secure data disposal service for those who do not want to be tracked, electronically or otherwise.
17. Virtual Clutter Organizer
Specialists will help us organise our electronic lives. Clutter management would include effective handling of email, ensuring orderly storage of data, management of electronic ID’s and rationalizing the applications we use.
18. Time Broker / Time Bank Trader
Alternative currencies will evolve their own markets – for example time banking already exists. (Time banking facilitates reciprocal service exchange based on units of time.)
19. Social ‘Networking’ Worker
Social workers for those in some way traumatized or marginalized by social networking.
20. Personal Branders
An extension of the role played by stylists, publicists and executive coaches –advising on how to create a personal ‘brand’ using social and other media. What personality are you projecting via your Blog, Twitter, etc? What personal values do you want to build into your image – and is your image consistent with your real life persona and your goals?
I added a few of my own to the database (trying to avoid repetition) which would both be needed and economically justifiable:
(1) Organ Agent: person who sources and negotiates real or artificial organs on behalf of those in who want them. Interacts with donor, manages prices or bids if applicable, negotiates with hospitals, and so on.
(2) Automated Systems Monitor: person who oversees automated systems (e.g. smart highways) and intervenes and corrects as necessary. “ASMs” would each need specific expertise in their field — transport or manufacturing or surgery or whatever is automated — but would share the specific skill of being a complex-automated-system monitor, evaluator, and emergency troubleshooter.
(3) End-of-Life Planner: person who helps people plan and manage their own death (combating the fact that medicine/technology will be able to keep most people technically alive pretty much forever).
You can add your own thoughts by taking the survey at http://www.zoomerang.com/Survey/?p=WEB229HP2J3ALX closing date: August 19th, 2009.
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